High Closing Cost

[David Fals]

I’m checking on how most mortgage companies' closing costs compare to this. I made an offer earlier today for a rental property 25% down and am waiting to hear back, but my realtor advised me to at least give a lender a chance to get me pre-approval, claiming they secured good rates.

However, the pre-approval they provided was significantly higher than what I expected 7.625% conventional. This looks like I will need $16k to close. I guess I need to keep shopping around.

Other lenders I reached out to never gave me a rate just pre-approval letters so I never knew what I was expecting until I got an offer accepted."

My credit score is 712 on Experian, 720 on Transunion, and 690 on Equifax. One of the loan officers informed me of these scores and said they always consider the middle number.

*Purchase Price - $189,900.00*

*Base Loan - $142,425.00*

*Downpayment - 25% ($47,475.00)*

Origination Charges

*Points - $2,146.00*

*Flood Certification - $8.00*

*Credit Report Fee - $100*

*Appraisal Fee - $800*

*Loan Origination Fee/Avg Branch Fees - $1,490*

Title and Closing Fees

*Lender's Title Insurance - $400*

*Lender's Title Insurance - $1,270.10*

*Owner's Title Insurance (Optional) -$267.10*

*Closing Protection Letter - $125*

Title Services or Lender's Title - $317*

*Deed Preparation - $75*

Recording and Transfer Fees  
Mortgage /Deed of Trust $144.25  
Deed - $90  
Transfer Tax - $4,747

[Devin Peterson]

Quote from @Ryan Spath:

@David Fals I'm not a lender, but looking at this it seems high to me also.

• Points (1.5%): At $2,146, that's roughly 1.5% of the loan, which is a bit high unless it's to buy down the rate—though 7.625% is not a bought-down rate in today’s market (as of May 2025).

• Loan Origination Fees ($1,490): Slightly high but not unheard of.

• Transfer Tax ($4,747): This is very state/county-specific and very high relative to purchase price (~2.5%). If you’re in a high-transfer-tax area (like parts of Pennsylvania or Florida), it’s plausible. Elsewhere, it’s worth reviewing.

In total, 3–5% of the purchase price is considered average for closing costs. For your $189,900 home:

• 3% = ~$5,700

• 5% = ~$9,500

You're well above that—likely due to:

• High transfer tax

• Points

• Possibly lender buffer reserves

• I would definitely shop this loan, often times when a lender is working to earn business via competition the fees/rates can get better. Consider trying a local credit union and a mortgage broker.

Speaking as a long time investment mortgage broker 2 things:

1. The points are high-ish relative to what you asked for in a buy down

2. The origination is actually extremely low. I find it that most real estate professionals and borrowers expect lenders to work for free! Especially when they are hard-working brokers. Your origination is relative to the loan amount. If you’re not a mortgage broker, then you don’t understand the stress, attention to detail, and expectations everybody sets on you and then tells you to cut your fee!!! so with that being said, the origination here is not high in the slightest rather this person I believe, is giving you more than a great deal. I find it too often that people expect loan brokers  to do everything for them and then pay them like garbage. It’s sad really.

Everything else seems standard. 

with that being said always get a second opinion, I recommend connecting with an experience mortgage broker who can help you shop multiple lenders at once so you can avoid getting swindled and wasting your time. Best of luck!